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Michel Chevalier & Michel Gutsatz: Luxury Retail Management: How the World's Top Brands Provide Quality Product & Service Support“Part conceptual, part operational, the book is truly insightful. Each chapter prompts key questions that luxury professionals are facing, and thanks to the authors’ trusted expertise, the insights and solutions described are very
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Private Label Beauty Brands: an Executive Briefing

Private Label Beauty Brands: an Executive Briefing for EurostafA complete Report written for Eurostaf:
The new competitive brands environment
Why are private label brands a major issue today?
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What are the different strategies led by retailers and the different business models?
What are the key success factors of private brands?
What are the new challenges faced by national brands?

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July 20, 2014

Shinola: Building a Made in USA brand

My clients, my students, just like many participants in my conferences, often ask me the same question: "Is it possible to build a new premium / luxury brand today?" My answer is always, "YES, BUT ... Yes, it is possible, but you still have to have the required brand management expertise". Let me illustrate this with the help of a series of detailed cases that I will present on BrandWatch. This is the first one, on the American brand Shinola.

Whom does Shinola belong to? Shinola is a part of the Bedrock Manufacturing portfolio, an investment fund created by Tom Kartsotis, one of the founders of Fossil, a company from which he parted ways in 2010. The concept behind Bedrock: The fund decided to invest in brands that exemplify a concept called "skill at scale" - it consists of developing businesses that employ skilled workers and craftsmen producing high quality, made-​​to-last products in the service of "heritage" brands with a real history that are capable of building a strategy based on a strong image. Besides which, all these brands have to rely on manufacturers that are essentially American. We find there, of course, some of the theoretical fundamentals of European luxury brands. This choice was based on a consumer mega-trend I often discuss in my lectures: the desire for local products. The desire to use products of regional or national origin (the Americans have termed it 'locavore') is therefore at the origin of the EATALY success that I wrote about on BrandWatch in March 2009. One can again find it in the movement that strives to bring product manufacturing back to the USA, as is well explained in the Harvard Business Review of March 2012, "Reinventing America". The "Heritage" dimension of Shinola: Shinola was originally a well-known shoe polish brand in the USA. The name became a household word with the expression, "You don't know Shinola from shit", which means, in other words, "you really don't get it". Bedrock therefore chose to re-launch an existing brand but it reinvented it completely.

The Shinola offer: Shoe-polish, of course, but the product offer goes well beyond it. The range is built around four categories: watches, leather, bicycles, notebooks. Each of these categories has been chosen with the aim of recreating or defending American production.

The Shinola history and image strategy: It is based on two strong concepts.

"Where American is Made": Each article is assembled in the USA and each component is manufactured - if possible - in the USA. A chart on its website shows the origin of each of its components:

One finds that its expertise in 'watches' ​​ stems from a partnership with one of the last independent Swiss movement manufacturers, Ronda AG - that helped Shinola build a workshop (intended to produce more than 500,000 watches a year) and train its staff - as the following video shows:

Detroit: The decision was taken to establish Shinola in the erstwhile automobile capital of America - in order to give it access to skilled workers, and also for its image. The brand presents itself as local, with the clear desire to help redevelop the city. This is very clear, for Detroit even appears in Shinola's logo.

Price positioning: Here we are without doubt in the "affordable luxury" brand range. The watches cost from $ 475 to $ 950. The bags ("Handmade Leather Goods") are around $ 250 (and under $ 100 for small leather articles). The notebooks cost 50% more than Moleskine. Only the bicycles are expensive: from $ 2000 to $ 3000. The retail concept: Shinola is distributed through its own stores and wholesale distribution channels. The shops (the one in New York has just opened in Tribeca) are clearly in tune with the times: very modern spaces in semi-industrial buildings, where today (given the still limited offer of the brand) one also finds other products, all of them manufactured in the USA (and also a juice bar).

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Shinola: Building a Made in USA brand

My clients, my students, just like many participants in my conferences, often ask me the same question: "Is it possible to build a new premium / luxury brand today?" My answer is always, "YES, BUT ... Yes, it is possible, but you still have to have the required brand management expertise". Let me illustrate this with the help of a series of detailed cases that I will present on BrandWatch. This is the first one, on the American brand Shinola.

Whom does Shinola belong to? Shinola is a part of the Bedrock Manufacturing portfolio, an investment fund created by Tom Kartsotis, one of the founders of Fossil, a company from which he parted ways in 2010. The concept behind Bedrock: The fund decided to invest in brands that exemplify a concept called "skill at scale" - it consists of developing businesses that employ skilled workers and craftsmen producing high quality, made-​​to-last products in the service of "heritage" brands with a real history that are capable of building a strategy based on a strong image. Besides which, all these brands have to rely on manufacturers that are essentially American. We find there, of course, some of the theoretical fundamentals of European luxury brands. This choice was based on a consumer mega-trend I often discuss in my lectures: the desire for local products. The desire to use products of regional or national origin (the Americans have termed it 'locavore') is therefore at the origin of the EATALY success that I wrote about on BrandWatch in March 2009. One can again find it in the movement that strives to bring product manufacturing back to the USA, as is well explained in the Harvard Business Review of March 2012, "Reinventing America". The "Heritage" dimension of Shinola: Shinola was originally a well-known shoe polish brand in the USA. The name became a household word with the expression, "You don't know Shinola from shit", which means, in other words, "you really don't get it". Bedrock therefore chose to re-launch an existing brand but it reinvented it completely.

The Shinola offer: Shoe-polish, of course, but the product offer goes well beyond it. The range is built around four categories: watches, leather, bicycles, notebooks. Each of these categories has been chosen with the aim of recreating or defending American production.

The Shinola history and image strategy: It is based on two strong concepts.

"Where American is Made": Each article is assembled in the USA and each component is manufactured - if possible - in the USA. A chart on its website shows the origin of each of its components:

One finds that its expertise in 'watches' ​​ stems from a partnership with one of the last independent Swiss movement manufacturers, Ronda AG - that helped Shinola build a workshop (intended to produce more than 500,000 watches a year) and train its staff - as the following video shows:

Detroit: The decision was taken to establish Shinola in the erstwhile automobile capital of America - in order to give it access to skilled workers, and also for its image. The brand presents itself as local, with the clear desire to help redevelop the city. This is very clear, for Detroit even appears in Shinola's logo.

Price positioning: Here we are without doubt in the "affordable luxury" brand range. The watches cost from $ 475 to $ 950. The bags ("Handmade Leather Goods") are around $ 250 (and under $ 100 for small leather articles). The notebooks cost 50% more than Moleskine. Only the bicycles are expensive: from $ 2000 to $ 3000. The retail concept: Shinola is distributed through its own stores and wholesale distribution channels. The shops (the one in New York has just opened in Tribeca) are clearly in tune with the times: very modern spaces in semi-industrial buildings, where today (given the still limited offer of the brand) one also finds other products, all of them manufactured in the USA (and also a juice bar).